July 10, 2012

Accounting would seem to be an ideal major for online higher education. There aren't any labs and it has right and wrong answers so tests can be graded by computers. To be an accountant you have to pass the CPA exam, so why hang around college for four years taking random humanities courses when you could just study accounting really intensely at home for a couple of years and then pass the CPA exam?

Right?

Well, the accounting professional societies have been well aware of these arguments since the days of correspondence courses. And they don't favor making it cheaper and faster for you to become an accountant like them. In their minds, they have quite enough competition as it is. Plus, it's more pleasant to associate with fellow accountants who have also taken Art History rather just drudge away at accounting.

So, they've responded with a long state-by-state campaign for "The 150 Hour Requirement." Over 40 states now require that anybody sitting the CPA exam must have 150 credit hours of higher education. That's not four years of college, but five.

The American Institute of CPAs helpfully explains how to get your 150 hours:

Combine an undergraduate accounting degree with a master's degree at the same school or at a different one;

Combine an undergraduate degree in some other discipline with a master's in accounting or an MBA with a concentration in accounting;

Enroll in an integrated five-year professional accounting school or program leading to a master's degree in accounting.

In this world, there are a lot of organized Powers that Be, such as the accounting professional organizations. And most of them don't have much incentive to make college cheaper for those who aren't part of organized Powers that Be.

97 comments:

Anonymous
said...

In the UK, I believe undergrad is 3 years. And there isn't a separate law school you go to afterwards. Aspiring lawyers specialize in law for undergrad and finish legal education in 3 years. They then become legal apprentices where presumably they do paralegal type work and then become lawyers eventually. I believe it's similar with their medical training. They specialize earlier.

If lawyers just need 3 years of schooling with no separate undergrad, there's no reason accounting should require 5 years.

I graduated (cs) into the outsourcing/insourcing craze while watching lawyers protect themselves (though that's finally changing I think), and that thought of other people covering themselves makes me angry. If you get cheap code, I should get cheap accounting.

More generally, this is a real punch in the gut. I was hopeful that online instruction was going to disrupt things in a big way. This brings me back to earth. thanks?

The big investment banks recruit Ivy Leaguers and other elite school grads right out of undergrad as analysts. They don't care if you majored in English or History if you've gone to a top school and have good grades, SATs, do well in the interviews, etc. After they're hired they go through a training program at the investment bank during the summer after graduation for a few weeks where they learn accounting. Most of what these investment bank analysts do is accounting work with Excel. They learn it all in the training period and on the job in the first few months. These investment banks don't even recruit actual acccounting majors who've been studying accounting for 5 years. They just teach it all to the new hires in a couple months.

As an accounting student myself I'd like to say there is a lot of gray area in accounting! But you're mostly right, more years of schooling won't help with that.

I'm doing my 150 hours in 4 years by double majoring in accounting and finance. Along with taking 18-21 hour semesters. I want to spend as little time as possible in school, and I'll very well take more classes a semester for that.

The most I'll consider is going back to school for the MBA down the line; but a grad degree in accounting won't help at all if you can already get your CPA.

In this world, there are a lot of organized Powers that Be, such as the accounting professional organizations. And most of them don't have much incentive to make college cheaper for those who aren't part of organized Powers that Be.

Right. It's rent-seeking. I mean the reason Tyler Cowen can comfortably eat out every night at a different restaurant in one of the richest areas of the country (Fairfax, Northern Virginia) and spend large amounts of his time surfing the web and blogging while holding a secure position at a really crappy university is because of rent-seeking. But he seems oblivious to it when analyzing things. Is it self-deception?

In England & Wales, you don't need a Master's degree to become an accountant. You don't need a Bachelor's degree either. In fact you don't even need A-Levels i.e. you don't need to have completed Sixth Form College (roughly equivalent to High School I think).

You can start straight away doing "Accounting Technician" exams that you complete while working, then move onto the Chartered Accountancy exams, also completed while working.

It's still hard to qualify, because the technical and professional exams are hard but there is no need to arbitrarily restrict entrance to the profession to thos who can afford to attend Uni.

For a long time there was a similar route into law by way of the ILEX paralegal qualification, don't know if this still applies.

I'm an accounting major (audit track) and I totally understand the exclusionary nature of this. Through high hour requirements, a very difficult exam, and the semi-apprenticeship system, the AICPA is doing what organizations like it are MEANT to do: make it harder to join their ranks, which keeps supply artificially low and prices (read: salaries) artificially high. Add that to the artificially high demand for their services (e.g. Sarbanes-Oxley aka The Auditors' Full Employment Act) and they've got a tidy little guild. Oh, and the master's semi-requirement is a good deal for people like me because it sets the stage to trade up from a 'meh, decent' school to a really good one with a good GPA and GMAT.

The AMA does this to a decent extent for doctors, the ADA does a good job for dentists (as I understand it), and the AICPA does its part for accountants. Given that professionals don't typically unionize in this country, this is an acceptable substitute and secures decent incomes for most doctors, dentists, and accountants, respectively.

If you want to see a market where the professional association fell down on the job, look at lawyers. The ABA has refused for decades to take steps to vastly shrink the supply of lawyers, which has resulted in a glutted market (more than two grads for every job), little/no job security for lawyers, poor salaries outside of BigLaw, and absolutely horrid working conditions everywhere. Throw in six figs of nondischargeable debt and you've got yourself a recipe for an incredibly elitist profession (First tier or don't go is a safe rule, and T14 or don't go is a better one) and a lot of ruined lives.

Stuff like this makes you want to forsake the whole online ed project. If there is a lot of money in eLearning, I'm sure the business could fund a disparate impact assault on the association - smells very Regatta-ish.

Good post, thanks. You shouldn't need a B.A. to attend law school or medical school, either, although for medical school I see the logic of requiring science classes that would take two years, not four.

Indians do their pre-med in the last two years of high school and then go to medical school. They are younger and have less debt when they finish medical school than comparable Americans. If you want more home-grown doctors, make it cheaper and faster to become a doctor.

Steve,I work in public accounting and fortunately, I was grandfathered under the 120 hour rule in New York (for any graduate after 2009, the requirement to obtain a CPA license in New York is now 150 hours). The 150 hour requirement is absolutely absurd. All it does is drive up student costs, prolongs adolescence, etc. It adds zero value to the profession and was in part a reaction to the accounting scandals of the early 2000s.

Accounting is really one of those professions that if done correctly, could be done online in 2.5 to 3 years (or even 2 if basic financial and cost accounting could be taken during high school).

Plus, it's more pleasant to associate with fellow accountants who have also taken Art History rather just drudge away at accounting.

Steve, you're very close, but not quite on the money here.

The real thing is that it is -unpleasant- to associate with accountants who have -not- taken art history. It's a minor distinction but an important one. Basically its all aimed at keeping accounting as a high(er) status profession than say, welding.

Accounting experts and AI experts: It seems to me almost all of accounting could be automated easily with today's technology. Am I wrong?

It's interesting that IT, which has not had time to build up all these barriers to entry for firms and employees, is the only sector of the American economy that is constantly growing and increasing productivity.

Professions were taken over by guild organizations who demand entry requirements via education, experience & an exam. tho things look well-regulated on paper, what would be better is: if you pass the test, you're in - no matter how you learned the info! "BIG EDUCATION" would hate that! -- panjoomby

Its actually somewhat weirder than that. Apparently to sit for the CPA exam you have to not only have so many credit hours, but you have so many credit hours of accounting. Now whatever the virtues of elite Ivy League type schools (at least the one I attended), they don't offer accounting courses. The Big, well now Four, have developed a system of feeder schools that are all what most people would regard in the second or third rank. One of my classmates at business school had graduated from Cornell undergrad and wanted to become an accountant. Even though she had a MBA, she enrolled in a local community college after graduating to get her accounting credits up so she could enter the profession.

I knew some older, Ivy league educated accountants who actually tried to help me get a job at their firms when I was entering the workforce, but they had no idea how much the rules had changed.

You also have to have a certain number of hours of actually working for an accountant before sitting for the CPA exam, which in practice means you have to find something like a Big Four firm to hire you even though you can't do much accounting work, in the hopes that you pass the exam later. You can't just take the exam and hang out your shingle.

The legal profession is somewhat similar -you can't just sit for the bar exam without going through the law school gateway- but the accounting profession is probably more extreme in its barriers to entry. Though accounting has a reputation for being boring, its a very good, steady career and there isn't really that much math. Or it used to be a very good, steady, career, as the drop from the Big Eight to the Big Six to the Big Four indicates, its come under some pressures in recent years.

I remember part of the argument about the 150 hour requirement was to make accounting more of a profession like law and medicine. Since law and medicine required one to get a post graduate degree, accountants felt they could split the difference and require 5 years of study.

Actually, yoou can take community college courses, community colleges offer junior level accounting courses if you don't want to transfer to a 4 year. But most do unless they had a lot of accoutning experiance at a job for several years.

Well, the main reason that the political class keeps pushing open borders is, apparently, that the wages of qualified Americans are too high (due to restrictive practices), and third world competition is needed to bring them down - and hus lower prices for the consumer, which is held to be an overall benefit. Thus sprake Alan Greenspan himself, no less (now, what's happened to him after that little bust-up that occurred on his watch?). Methinks that rather than importing Bangalore degree-mill certified accountants by the million to 'cut costs', a simpler way would be to cut out the college requirement, which is entirely superfluous, after all no corporate bean-counter will ever be held to the responibility of pleading for your life or fighting for your life.

Several engineering society's, the American Society of Civil Engineers in particular are trying to do the same thing. Fortunately, they aren't successful yet.

When I was studying civil engineering in the early 60s, anyone who had eight years experience working for a licensed engineer could take the licensing exam. No college degree was required. This only changed in the 80s, when an ABET-accredited BS was needed to take the exam.

The legal profession is worse. Seven years of school for the privilege of sitting for the bar exam. In some states, like Washington, you can apprentice for a period of time and that qualifies your for taking the bar exam.

That's just like the RIAA Steve. How'd that work out for them? After all, corporations now often outsource basic legal and accounting work to India. A poorly trained Indian worker can do it far cheaper than an expensive guild person here.

You're thinking 1970s, in todays ever-cheaper global labor pool, the benefits from either capital investment (think Amazon) or outsourcing, or both produce winners. In that sense it matters not what the Accounting Guilds do if the people who hire them simply go for cheap Indian labor overseas (or here with H1-Bs). Sooner or later the guilds will have to make major concessions or see everything swept away.

Many major hospitals use Indian X-Ray doctors overseas, not on site; the OC Register is edited largely in India, not in Santa Ana.

Well, sure. But what about the countervailing PTB? Like, say, the companies that use accountants? They'd probably prefer accountants who don't have huge debt loads, who don't need to jack up their wages to repay those debts. Who aren't as well-rounded and -networked as the accountants with 150 hours.

In fact, I bet these companies would rather outsource to Bangalore. Or replace human accountants with software.

I needed six units of accounting to get my doctorate. That's why I'm not Doctor Albertosaurus.

The other reason was that I had used up all the available financial aid. If I was going to take those two accounting classes I was not only not going to be paid as I had been every semester thus far, I would actually have to pay the University for tuition. Unacceptable.

Grad school had been good to me. I had made more money as a student than I had as full time civil servant. But there were no more scholarships, felowships or TA slots. I quit with a Masters.

The Gods of Irony saw to it that it wasn't long before I was up for a job to supervise an accounting unit. I told the director that I had taken "managerial accounting" in school. That was good enough to get me the job. I had of course had just made up that term.

As it happened my county ran a particularly clean and accurate operation. In the odd world of government accounting this meant that we were routinely audited while the bad programs were never scutinized.

The Feds didn't want to find fraud and abuse. At this time the newspapers were filled with stories of agency heads being incarcerated. Whole agencies had been locked up.

The Feds preferred to audit us (me) over and over again. That's how I became an expert in defending our accounting practices. I still didn't know any accounting but it didn't seem to matter.

Maybe there really should be something called "managerial accounting".

There is real math and there is accounting. Every large organization has accountants just as every organization has janitors. The career trick is to not be either.

This has been going on since at least the Middle Ages with its guild systems and keeping basic craft ideas as occluded as possible under the claim of regulating quality and price.

Heck laws precluding the use of private millstones were an early form of this regulative capture designed t increases millers wages and tax revenue.

This is natural and logical since having a large number of entrants into a field diminishes employment opportunities, wages and status.

However technology will sooner than later eliminate many of the jobs as it has with tax software, automation and other things

The results are as we can see unpleasant.

However in time I suspect that critical mass can be built to eliminate the racketeers social advantages. This will happen when th natural momentum of the system renders society untenable as configured. This will be sooner than later.

This may also have the trait of reducing the demand for these professions, possibly catastrophically but cei la vie ...

Good point. Something like accounting should be the low-hanging fruit of online ed. It's vastly easier material and much more straightforward to teach than all those sciences and engineering disciplines that MIT and Stanford are or are planning on teaching online.

Also, professional accountants spend most of their time working with Excel spreadsheets and accounting software. So the field is sort of tailor made to be learned via computer through video or interactive guides taking you through spreadsheets, balance sheets, income statements, etc, doing exercises on the computer, etc.

Maybe American universities were more meritocratic, and so most people figured smart people got into them fairly. But maybe privileged people were favored for elite colleges in Europe, and so there was bound to be more upheaval and rebellion.

In a way, the post-war policy was continuation of the fascist policy. Nazi Germany favored Germans over smart Jews. Under the Nazi system, there was more opportunity for the masses of Germans. Nazism was a mass movement. It not only got rid of Jews but didn't much favor the old elites. Nazis sought to create a new elite by appealing to the masses, and that meant more opportunities for the common man.

I have a feeling that it'll be computer programmers and IT people that'll be disproportionately affected and screwed by the online ed thing. Just like they've been disproportionately affected and screwed by outsourcing. Because they tend not to be very politically or socially savvy and organized. And many of them tend towards libertarianism and not a few of them are on the Asperger's spectrum.

Accounting also seems to be protected by a quasi-legal protective status the industry gets to do major audits and the like. It's usually big, connected firms with teams of lawyers who get the big accounts to do the ritual audits for large corporate transactions.

I wonder if the most likely outcome of all this online higher ed hype will be brick and mortar universities still being around and dominant, just with students with iPads sitting around together in a class doing stuff on their iPads. While pure online higher ed remains a backwater like correspondence courses.

"In the United States, students graduating after Jan 1, 2003 must complete a Doctor of Pharmacy degree to become a licensed pharmacist...Any person holding a bachelor's degree in Pharmacy who graduated before this date is grandfathered and can register."http://en.wikipedia.org/wiki/Pharmacy_school

You can see a lot to counterbalance the signaling model of higher education just by looking at CPAs. Credentials count just as much as signaling. Disentangling the two would be tough.

Banks require their customers, based upon the size of the loan, to have compiled, reviewed or audited financial statements. Only CPAs can do this work. You could certainly find bank regulations that create these policies.

You don't need a CPA to compile financial statements for a small company. I have six hours of accounting classes. I'm capable of compiling financial statements for small companies, but no bank would ever accept them.

Legal, regulatory and other roadblocks such as these will need to be cleared before online education will really take off.

I find it odd that private groups can set the education hours for the credentials required to meet legal requirements such as becoming a CPA

Only 10% of accountants are CPAs. The hour requirement is pretty stupid and the CPA exam has at least one section designed to be nothing but an IQ test, making it reportedly more difficult than the bar exam.

Yeah, it's five years, but it's four years of undergrad($$$) plus a year in the masters program($$$$$$$$$$$). For the Big4, an internship is nearly mandatory before being hired full time. Having your masters before being hired full time is preferable by the company and the employee, as it's difficult to find time to complete it as a junior associate.

I just finished up an undergrad in accountancy at Big State U. At the end of my junior year the sales pitch for the masters program exploded. Funny, they never mentioned how important a masters was early on.

LSU does offer an online masters program, but I think there's a campaign to not count those credits.

I'm a bit bitter about the whole thing, but the foreign students in my program(about ~20%) and even more upset. They shelled out foreign tuition rates for zero benefit.

Yep. In FL, one must do the 5th year of college, along with dozens of hours in accounting and accounting-related courses in order to sit for the CPA. I did a BS in Computer Science and an MBA. My core MBA accounting courses did not apply as the necessary prerequisites for sitting for the CPA exam. If I want to take the CPA exam, I'd have to take ten accounting courses - cost accounting, managerial accounting, etc.

By the way, there are several reputable universities that offer the MS in Accounting completely or nearly completely on-line. For example, Auburn, Northeastern, and several others.

I ended up taking and passing the rigorous 4-part Certified Internal Auditor exam.

This is a good example of how protectionism within a profession or guild is supposed to work. I've been in the field for nearly 20 years, so I know of what I speak.

Even with the high cost of college, accounting is still one of those professions where you can get a significant payback (all due apologies to Captain Capitalism).

Think of it like this. We had an atom bomb hit the profession with the collapse of Enron and resulting Sarbanes-Oxley Act. The profession got, overnight, roughly twice as much work. At the same time, ongoing efforts to promote the 150 hour rule pushed quite a few college students into other majors.

The result? Significant increase in demand and serious constraints on the supply of accountants. Which meant that our pay went up enormously.

It used to be that you would work 2 years in the Firm, then move to industry. Comp would be $30-35k, then jump to $55-60, and would cap out in the low $100s. Now comp is much, much higher, with comp for assistant controllers reaching the low $100s, and for controllers reaching $150k+.

So could a person get an accounting education online or by studying? Of course, I did. I had to, since I couldn't get a job with a BA in STEM!

The AICPA, CALCPA, NYSCPAs, and other professional organizations are doing exactly what they should: organize. Blue collar workers and government workers have unions, white collar professionals have organizations like the AMA, ABA, and AICPA. All these groups protect our interests, which includes making it hard to get into the profession. A college degree is required, but you still have to be able to do math. Sure, the bar is artificially high, but that helps keep the dumb and the average out.

Compare this with the plight of the engineer or the scientist. Even with a Ph.D in a STEM field you might not get a job, and if you do you'll work 15 years to get to the princely annual sum of $75k. No thanks.

You don't have to be rich to be a CPA. State school is perfectly adequate. You won't ever be truly rich, but you can be working class rich. And why in the world would we CPAs want this to change? So we can lower our salaries? Again, no thanks.

Academic credentials are a good example of public choice rents or monopoly rents. Academic credentials are the equivalent of life titles of nobility. Titles of nobility are against the supreme law of the land for US citizens. They're unconstitutional.

In the early '80's in SF, I had a summer renter who'd won the award for best 1L accounting student at U. Chi. biz. He was from New Jersey and had a massive, Philip Roth-style inferiority complex. He'd start ticking off the names of all the accomplished people who were Jewish. There was nothing I could do to re-assure him that I saw Jews as capable. A few years later, the WSJ had a piece about his conviction for insider-trading while working for a NYC law firm. In the sentencing hearing, the judge chided the U.S. attorney for over-aggressiveness, saying, "this guy has a negative net worth!"

Dorms started going co-ed in the early 70s and it was already apparent that "higher education" had become primarily a way to funnel girls into corporate harems in urban centers. If you can't physically access the girls then what's the point?

Yep. Compare and contrast the shameless rent-seeking of traditional white-collar professional guilds in accounting, architecture and law to IT's sad state, where techies' own trade publications lecture them about how they better not even think about securing benefits for their group.

"This country's future is incredibly bright as long as we rely on the drive, talent, and innovation of American workers and students and not on legislative barriers whose only doomed purpose is to preserve the past and forestall the future."

Good post, thanks. You shouldn't need a B.A. to attend law school or medical school, either, although for medical school I see the logic of requiring science classes that would take two years, not four.

Pre-med requirements in undergrad take about 2 years to complete. And pre-med students usually decide before starting undergrad, or during freshman year, to go pre-med, and thus have an intention to focus on medicine. There's no real reason why this path should be stretched out to 2 separate degrees and several more years.

Columbia has the oldest and largest "Postbaccalaureate Premedical Program". That is, a premed program for people that already have a bachelor's degree and need the science and math prep and requisites to apply to med school. The coursework in the program can be completed in 2 years, or in 18 months on an accelerated track.

I don't know how representative this is, but the profiles of students of the program suggest that they're mainly students who graduated undergrad from top schools in lib arts and dicked around for a few years before deciding to become doctors:

"THREE years ago, Molly Grassini was living the life of a struggling actor, landing roles in small theater productions, acting in a Web series and bouncing between auditions in Los Angeles. The closest she came to a career in health care was a featured part in a Vitamin Water ad.

So it may seem a leap that the onetime actress, at 26, has her sights set on medical school...."

"Ms. Grassini is about to accomplish Step 1 in her professional transformation. In May, she will complete a post-baccalaureate pre-med program at Columbia University, where she has progressed through a tightly scripted roster of every foundational science and math course that she did not take while singing, dancing and acting her way through an undergraduate degree in fine arts at New York University. With these prerequisites in hand, Ms. Grassini expects to gain admission to medical school in 2013.

Like Ms. Grassini, many older students (mean entry age: 28) are relying on post-bac programs to resuscitate — or initiate — dreams of practicing medicine. More than 15 percent of last year’s new crop of medical students had gone through such a program, according to the Association of American Medical Colleges, and the number of programs has mushroomed. Today, there are about 135 listed with the association, an increase of more than 45 percent over 2009."

"“Post-BAC pre-med” can refer to any of a number of programs of study taken up after a student has earned a bachelor’s degree. Some are master’s level and assume some proficiency in prerequisite science courses. But the most popular and fastest-growing programs are like Columbia’s, which delivers a rigorous lineup of prerequisite undergraduate courses with wraparound support, including MCAT preparation, advising and health care volunteer work. They hope to help would-be doctors (and dentists and veterinarians) put forward the best package of grades and experience when applying to medical schools.

At Columbia, enrollment grew to 606 students last year, from 282 in 2000. Washington University in St. Louis introduced its post-bac in 2006; since then, enrollment has tripled. Goucher College received 400 applications for 30 spots in its 2012 class."

"What a student misses by going alone, however, is the support provided by an academic adviser who will act as sounding board, guide and writer of the all-important letter of recommendation to medical school committees. Some programs have agreements with medical schools that offer qualified post-bac students early admission."

"Students with none of the undergraduate courses that medical schools require should expect to take a minimum of two semesters each of chemistry, organic chemistry, biology and physics. (Post-bacs are typically full time and run 11 months to two years; some programs, like Drexel’s, offer evening classes; Northeastern University has an online option.)"

The AICPA, CALCPA, NYSCPAs, and other professional organizations are doing exactly what they should: organize. Blue collar workers and government workers have unions, white collar professionals have organizations like the AMA, ABA, and AICPA. All these groups protect our interests, which includes making it hard to get into the profession. A college degree is required, but you still have to be able to do math. Sure, the bar is artificially high, but that helps keep the dumb and the average out.

Compare this with the plight of the engineer or the scientist. Even with a Ph.D in a STEM field you might not get a job, and if you do you'll work 15 years to get to the princely annual sum of $75k.

In other words, the deadweight overhead of the economy - lawyers, accountants, etc. - is protected and inflated, while the STEM fields that could produce actual technological innovation and value are ruthlessly exposed and unprotected?

Being a CPA provides a nice upper middle class standard of living away from the coasts. But in the nicest coastal areas, not so much

Certain places are already back above the bubble real estate prices. I am thinking San Marino (quite near where Steve lives) and West Vancouver are two examples.

In both San Marino and West Vancouver, prices are at more than 10x average income for the neighborhood

Another data point, land in the part of Manhattan Beach West of Highland Avenue is back above $30 million dollars an acre in recent transactions. $30 million an acre is roughly $700 a square foot for the raw land

CPAs that chose places like Indianapolis or Colorado Springs have a higher standard of living

Doctors, lawyers, IT, accountants are all skilled trade and should probably just unionize instead of creating these ridiculous, costly and non-job related hurdles to their professions. But then they would lose the shield of educational meritocracy which they cynically wield, similarly to the environmental shield that wealthy property owners use, as Steve has mentioned, to preserve their enclaves. Thus they avoid accusations of racism and exclusion and all the hiring laws- they are writing their own hiring laws. Let's put it to a popular vote - how many years do you want your accountant to go to school before he can take a test? None would be the answer. What the heck is the test for?

They'll never form a union, because, for a typical indoctrinated college grad to concede that he has the same pedestrian, xenophobic interests as the brightest white electrician, provokes nausea. The longer they stay in school the more god-like they become and then they forget what they really do for a living is keep rows of numbers and find tax loopholes for their ethically challenged bosses - the ones who proudly profess that they should be personally paying more taxes - if they believed that they wouldn't need such good accountants, it's the easiest thing in the world to overpay.

"I have a feeling that it'll be computer programmers and IT people that'll be disproportionately affected and screwed by the online ed thing. Just like they've been disproportionately affected and screwed by outsourcing. Because they tend not to be very politically or socially savvy and organized. And many of them tend towards libertarianism and not a few of them are on the Asperger's spectrum."

This. I knew several IT peeps at Intel about 15 years ago who were more fake-macho libertarian than thou, thumping their chests and quoting Ayn Rand and snickering at the mere idea of unions. Most of them are scrambling to find steady work now and complaining about wogs taking over their industry. Le sigh.

Amazed at prejudice against CPA's by Scientists and Engineers. Its all so super easy - except it isn't. I actually audited some super-smart scientist who took an accounting textbook home over the weekend and then thought he knew as much as I did about Auditing. Too bad he flunked human relations 101.

The most unionized and highly paid (based on their IQ/Skill) are teachers and Community college teaches. The least unionized are Engineers and ITs. They also have on average the lowest Pay/IQ ratio among the professions.

That's because they all think they're going to be the boss outsourcing the jobs or the super-genius the company will never, ever, fire.

Engineers are encouraged to take on a Master's program because the 10 extra engineering classes taken during the program can double the number of non-intro level engineering classes you get as an undergraduate. That is because a lot of time as undergraduates is spent taking higher math and science so you can understand the engineering.

This didn't leave much time for actual engineering courses, which have to be taken in sequence to be intelligible anyway. No point learning Structural Mechanics without Statics and Solid Mechanics, and you can't do Concrete design without Engineering Materials and Structural Mechanics.

Its certainly the same story in Accounting and other STEM type majors.

"...certain places are already back above the bubble real estate prices. I am thinking San Marino (quite near where Steve lives) and West Vancouver are two examples.

In both San Marino and West Vancouver, prices are at more than 10x average income for the neighborhood "

--------------------------

I grew up in West Vancouver in the 60's. The population there has been largely replaced with Chinese, Iranian and other people from offshore who appear to have almost unlimited amounts of money, probably ill-gotten. I could never afford to live there now. Never.

Amazed at prejudice against CPA's by Scientists and Engineers. Its all so super easy - except it isn't. I actually audited some super-smart scientist who took an accounting textbook home over the weekend and then thought he knew as much as I did about Auditing. Too bad he flunked human relations 101.

Accounting is a commodity service. Commodifying it is a good thing and lowers overhead.

Commodifying science and engineering ultimately retards progress and innovation in those fields.

Mickey Kaus writes at http://dailycaller.com/2012/07/09/the-trouble-with-real-merit/ regarding changing one of the effects of the current higher ed system: the social signaling of getting into a name brand university.

'Status would be impermanent–nobody would know who would end up where in life, since they wouldn’t be sorted out at the start, some being rewarded with fancy go-anywhere degrees (often mostly in recognition of their skill in acquiring fancy go-anywhere degrees). Since the knowledge needed to advance in a dynamic economy would always be changing, it would be hard to confuse discrete, particular skill sets with some sort of general rank. "

It does seem that a lot of grads from good colleges are dining out for a very long time on the results of a good SAT score on a test taken when they were 17.

Our political economy is completely backwards. I'm against outsourcing/insourcing, but if we're going to do it, we shouldn't be doing it to science and engineering, the lifeblood of the material economy. We should do it to commodity services like accounting, lawyering, much of banking (including investment banking, much of inv. banking services are commodity services), etc. that are just overheads for the economy, while protecting science and engineering.

I pretty much stay away from politics, reading about is all I can stand.

I am not fully against getting involved but I have yet to see an opportunity. A couple of years ago I was chatting with a representative of the NFIB. He had some good arguments to get involved, make a donation, and show up now and then at events. The NFIB is a powerful Washington lobby. I own a small business.

But then I came to realize that many NFIB members are accountants. I don't hate accountants, accounting is in the bedrock of civilization. But accountants have their own self-interest in mind which is often the direct opposite of my self-interest. Accountants advocate for legislation that makes running a business more and more complicated. Any businessman, like myself, and other than an accountant, wants running a business to be less complicated.

Entirely off-topic, for which I apologize, but is V. Putin on the juice? Judging from the muscles and brow-ridge in the photo that now leads on Drudge, I'd say a big yes to that. What are the implications if so? Yikes.

"Its certainly the same story in Accounting and other STEM type majors."

A very generous comment.

Engineers send rocket ships to the moon. Accountants do my taxes, because I'm lazy, yes, even too lazy to use TurboTax, but I'm sure I could manage.

Google "Famous Engineers" and then "Famous Accountants"

My favorite of either group:

3. Bob Newhart. This funny man got his first job out of the army working as an accountant in downtown Chicago. He claims to have invented his own system for balancing the petty cash—when the drawer was short, he replaced any missing money from his own pocket. When his boss accused him of not using sound accounting practices, he decided to try something else. Ironically, it was while he was working as an accountant that he began doing his famous telephone routines.

4:31, this is the guy you'ree replying to. Having expended hundreds of hours reading scamblogs, I can tell you that according to most in the profession the exact opposite is true. Accounting (especially audit) people typically jump into industry around the 2 or 3 year mark from public and do regular corporate stuff, while for lawyers it's a freakin' nightmare to apply to non legal jobs. Everybody thinks lawyers make zillions, so people assume that either you were too stupid to make it in law or you'll jump ship as soon as one of those legal positions opens up. Given that under half of students at most law schools actually get full time legal work, it's a really sad thing for them to have to wrestle with, even given my distaste for lawyers.

"Accountants do my taxes, because I'm lazy, yes, even too lazy to use TurboTax, but I'm sure I could manage."

Depends. If you're in 20's or early 30's you can do your own accounting and taxes. But when you get older and have some investments, property, or a business you'd be a fool to do it yourself. I'm an engineer, it's not the math. It's the labyrinth rules and regulations that will stump you. Unless you're an insomniac and a genius, you cannot have career doing one thing your good at, to put food on the table, and then expect to take up modern US accounting as a hobby.

Whether or not online higher ed is a good idea or works out, the reality is that a lot of universities need to be shut down or significantly downsized. Not just diploma mills, but a lot of mid and lower tier colleges only survive due to gov't subsidy and foreign students. They basically serve as a jobs program for administrators and professors.

I'm an accountant, and I always find it annoying when people assume I must be good at math. In fact, at my school there were a lot of my accounting peers who were former engineering majors who couldn't handle the math and science (my Alma mater's forte was engineering). So is accounting easy? Yes and no. The concepts are not difficult to grasp and there is no high level math. But the workload can be killer, especially junior and senior year. Professors still weeded out students, and lot of my peers had no life those two years. And at least in my day, you studied for the CPA exam your final semester, on top of your normal courseload.

The barriers to entry question is a good one. How about the medical profession? With rising healthcare costs, it doesn't make much sense to keep requiring such a high education level when most appointments involve executing a simple algorithm of checking various symptoms and basic recommendations. On the other hand, bad advice can do a lot of harm.

I'm not worried about online education turning STEM on its head; any kid who would rise to stardom because of an Internet connection and some online MIT courses is probably smart and motivated enough to have done so already.

However, automation concerns me a lot, in that I see a large proportion of people becoming economically useless except for as cooks, maids, chauffeurs, and other service people. This will create a huge social divide between white and blue collar.

Yeah, I think it's pretty clear at this point that a lot of higher education is a bubble, inflated by gimmicky student loans instead of gimmicky mortage securities. And yet, it's also an arms race.

Consider a bright 18 year old kid. In 1960, he'd have gotten a BS in some real subject, and he'd have gotten a good job on the strength of that degree. Now, he needs to get an MS in some real subject to have the same qualification, thanks to grade- and degree-inflation. On a society-wide basis, it would be rational for all such bright 18 year olds to go back to spending only 4 years in school instead of 7. But for each 18 year old, stopping at the BS means losing out in a lot of jobs to the guys who got the MS, usually without anyone even bothering to look at their resume--someone gets a pile of resumes and tosses everyone without a graduate degree to get the number of interviews down to a managable number.

This is the sort of situation in which stupid, destructive stuff can go on forever. Even if all the male peacocks are easy pickings for predators because of those silly decorative tails they use to attract mates, peacocks born without the tail live nice long lives alone and leave no descendants. And so the long tails remain, and peacocks keep getting eaten (or making unreasonably high house payments and student loan payments). Unthinking processes, like biological evolution and markets and social evolution, often just work out that way.

Anon: "Columbia has the oldest and largest "Postbaccalaureate Premedical Program". That is, a premed program for people that already have a bachelor's degree and need the science and math prep and requisites to apply to med school. The coursework in the program can be completed in 2 years, or in 18 months on an accelerated track.

I don't know how representative this is, but the profiles of students of the program suggest that they're mainly students who graduated undergrad from top schools in lib arts and dicked around for a few years before deciding to become doctors."

Right, but after two grueling years and high financial and opportunity costs, there's a very good chance that these post-bac pre-med students won't even get in to med school. Thanks to the AMA, med school seats are very limited and the acceptance rate is something like only 40%.

Yep, it's very much a game theory in action situation. If something is to the advantage of a few people, eventually a few more start doing it, especially if the economy goes south. Before you know it, it's not a question of one thing being advantageous and the other being more advantageous, but rather of one being insufficient and the other being necessary. I'm horrified by the notion of prosthetics that are better than the regular limbs for this very reason. If education is any indicator, it would soon be a virtual requirement for poor physical laborers to cut their limbs off to find work. We're a few decades away from that, fortunately, but that may be a real issue within my lifetime, given that I'm in my early 20s.

From what I see and hear, new & mid-level CPAs at public accounting firms work grueling hours practically year round for relatively low pay. Fifty hour weeks is standard; 60+ during tax season Jan - Apr. Salaries from $40K starting to $70K after seven to ten years. Much higher salaries for partners but they often have to buy into the firm at $100K +.

It varies. If you go Big Four, the hours do suck but that's modern America for you. Your sense of pay is definitely off, though. $50k+ starting and breaking the $100k mark at around the 6 or 7 year mark is pretty typical. For a normal American, good job security and six figs by the time you're thirty is a lot better than most people will do. If you're stubborn and make it to partner, though, (caveat: very few stay that long, most jump to industry for lower hours and better pay) you're financially set for life. The blog goingconcern has a lot of posts about this that you can look up.

"Columbia has the oldest and largest "Postbaccalaureate Premedical Program"."there's a very good chance that these post-bac pre-med students won't even get in to med school."

Ha ha, what a bunch of suckers. Go to a Caribbean medical school. My kid sister went to one. She did one semester of pre-med at the Nevis campus and then started med school program. As it happened, after she graduated she did her residency at Columbia, she never took the MCAT.Here's the website of her school (looking at it, I see the pre-med program is now one year instead of one semester, still the best deal in town).http://www.mua.edu/mua/index.php/pre-medical-program

Getting a master's degree really isn't helpful in getting a job with public accounting firms. I earned 151 credit hours in five years and got both a Bachelor's and Master's degree in Accounting but employers didn't care about my Master's degree, grades, or the specific courses I took. Also CPA firms don't really care what school you attended or whether you started at the community college level. I got 79 of my 151 credits at the community college level. What does concern firms is whether you passed the CPA Exam the first time you took it, which I did.

One of my former coworkers got hired right out of college for a full-time position. She earned a Bachelor's degree in accounting but didn't have her 150 hours yet. So she just went to the local community college and earned the additional hours at dirt cheap tuition rates. Some of the courses she took had nothing to do with either accounting or business but the partners at our firm were not bothered by this at all. They thought she was smart to do this.

By the way in Michigan you need 150 hours to be licensed as a CPA but you can take the Exam after only a Bachelor's degree. Therefore the smart strategy is to earn the Bachelor degree first, then take the Exam, then earn the extra credit hours last. If you've passed the exam but have a few college classes left firms will still hire you to a full-time position.

Thanks for doing a post on this. The last states to get on board with this requirement are doing so.

It's madness. Sheer guild protectionism. There is a phony justification for it helping the students be prepared, but the extra credits can be in anything, not accounting at all, but golf, basketweaving, etc.

I might also add that if an accountant wants to subspecialize in taxation, a master's degree is almost a requirement, and this was true even before the 150 hour rule. Which brings me to another annoying misconception about accountants - that we are all tax experts. Most accountants deal with auditing and bookkeeping, and barely deal with taxes.

Here's the Google Wallet FAQ. From it: "You will need to have (or sign up for) Google Wallet to send or receive money. If you have ever purchased anything on Google Play, then you most likely already have a Google Wallet. If you do not yet have a Google Wallet, don’t worry, the process is simple: go to wallet.google.com and follow the steps." You probably already have a Google ID and password, which Google Wallet uses, so signing up Wallet is pretty painless.

You can put money into your Google Wallet Balance from your bank account and send it with no service fee.

Google Wallet works from both a website and a smartphone app (Android and iPhone -- the Google Wallet app is currently available only in the U.S., but the Google Wallet website can be used in 160 countries).

Or, once you sign up with Google Wallet, you can simply send money via credit card, bank transfer, or Wallet Balance as an attachment from Google's free Gmail email service. Here'show to do it.

(Non-tax deductible.)

Fourth: if you have a Wells Fargo bank account, you can transfer money to me (with no fees) via Wells Fargo SurePay. Just tell WF SurePay to send the money to my ancient AOL email address steveslrATaol.com -- replace the AT with the usual @). (Non-tax deductible.)

Fifth: if you have a Chase bank account (or, theoretically,other bank accounts), you can transfer money to me (with no fees) via Chase QuickPay (FAQ). Just tell Chase QuickPay to send the money to my ancient AOL email address (steveslrATaol.com -- replace the AT with the usual @). If Chase asks for the name on my account, it's Steven Sailer with an n at the end of Steven. (Non-tax deductible.)

My Book:

"Steve Sailer gives us the real Barack Obama, who turns out to be very, very different - and much more interesting - than the bland healer/uniter image stitched together out of whole cloth this past six years by Obama's packager, David Axelrod. Making heavy use of Obama's own writings, which he admires for their literary artistry, Sailer gives the deepest insights I have yet seen into Obama's lifelong obsession with 'race and inheritance,' and rounds off his brilliant character portrait with speculations on how Obama's personality might play out in the Presidency." - John Derbyshire Author, "Prime Obsession: Bernhard Riemann and the Greatest Unsolved Problem in Mathematics" Click on the image above to buy my book, a reader's guide to the new President's autobiography.